VOL. 9 No. 3 | November 2018

12/16/2013

The flawed rollout of the Federal insurance exchange website has been a huge embarrassment to the President and seems perfectly designed to reinforce the basic economism narrative that the government can never do anything right and that all matters ought to be left to the so-called free market. It’s therefore instructive to review what has happened to one of the state websites, in Maryland, that also has failed to perform as promised (while other state sites, I gather, have been working well). Instead of being a simple parable about how government always messes things up, the true story is more complicated and lays a huge portion of the blame at the doorstep of the private sector.

To get the full picture I need to explain that Dr. Scot Silverstein, who blogs for Health Care Renewal about information technology, is very experienced in IT systems for physicians and hospitals, so has had a lot of opportunity to observe the IT industry at close quarters.

The whole story is quite convoluted and it also appears that we don’t know a lot of the story. The Sun reporters sought government e-mails about what went wrong with the Maryland site, but the state officials refused to release a number of the e-mails. Why? Because the withheld e-mails “involved the decision-making process of high-ranking executive officials.” Now, I would have imagined that that’s exactly why the reporters wanted to see those e-mails, and why the public arguably has a right to know what’s in them. But back to the actual website.

Maryland figured it would need a lot of help to get this website operational, and signed up a firm called Noridian to a $71M contract to construct the website. In doing so state officials bypassed the usual procurement procedures, presumably so they could get to work more quickly.

Noridian, having convinced the state that they knew exactly how to design and launch this website, then decided that they didn’t know how to do it after all, and turned around and subcontracted with another firm, EngagePoint. Apparently Noridian at least initially withheld this bit of news from government officials.

Noridian and EngagePoint between them kept reassuring the state that all was well and everything would work just perfectly and on time, leading several officials to make reassuring promises to the public which later came back to haunt them. The website went live and promptly crashed, and some time later the various parties were still trying to pick up the pieces.

As to why the site was such a flop, Noridian replied with a long list of excuses, as to how the site was such a complicated thing to develop and how many different, disparate functions all had to be coordinated in the same place—much more complex than Amazon selling you a book, for example. Dr. Silverstein’s response to this is telling. When you hire an IT firm that’s competent, he says, you expect them to tell you just how hard the job is going to be, how long it will take, and anything you need to know to make it work properly up front. His suspicion, based on his own sad experience, is that in order to snare the contract, Noridian deliberately put out a grossly overoptimistic schedule and work plan. Then, when everything blew up in their face, they suddenly discovered how hard things were after all.

Dr. Silverstein drew on his medical experience to note that, had a surgeon operated on a patient and encountered really nasty but easily foreseeable complications, and then tried to use the difficulty of the surgery as an excuse for not having anticipated and planned for the complications, we’d have a name for that—malpractice.

All this was bad enough, but it promptly got worse. Noridian and EngagePoint started pointing fingers at each other over the blame for the debacle. Eventually Noridian cancelled its contract with EngagePoint, but tried to keep the EngagePoint staff at their jobs and expected them to fix what was broken. EngagePoint sued and Noridian countersued. While the lawyers slugged it out, nothing got fixed.

I am reminded of stories from the very early days of fire departments in the U.S., when fire companies were private, for-profit firms. They would show up if your house was on fire and offer to put it out for a fee. If two rival companies both got to your burning house at the same time, they’d get into a fistfight out in the street as to who had priority to fight the fire, all while your house was burning down.

Not to suggest that the Maryland state government is blameless in this tale of woe and intrigue. But we eventually decided that if fire protection was going to be done in the public interest, we needed to get the private profit motive out of the picture. Maybe a similar lesson ought to be learned about how best to make an Obamacare website that works.